All Forum Posts by: Jonathan R McLaughlin

sorry FHLB 5 year advance to be precise

@Mike Freske for commercial loans way to do a quick and dirty ballpark comparison is ask the lenders/banks what index they use and what their "typical" spread is. Many banks use FHLB or another index plus a spread of basis points. Best spreads reserved for best customers but you should get an idea. FHLB +2.25  is about 5.25 now.

@Kaveh Jafari to be clear, if you can get a fixed rate 30 at prevailing or even slightly higher rates thats always a safer option and it should be available under 5% right now. Credit unions aren't usually the sources of the most competitive loan rates. And if you want to hold for a long time why not do that? 

Good luck.

@Kaveh Jafari 10 years isn’t too bad, and if you figure the pay down in 10 won’t be enough to make you feel comfortable I would question the purchase in the first place.

A few things to think about:

I would add the cost of refinancing to your numbers

If it’s fixed for 10 years as opposed to a reset at 5 that’s pretty good.

Using leverage profitability peaks around 10 yrs or so it’s a likely sale point anyway

Is there a prepayment penalty either throughout or one that steps down?

Ultimate goal for the property?

Good luck!

Jon

Not a lawyer, don’t even play one on tv, so this is not advice. It is however a prediction. In absence of case law to the contrary this clause will be unenforceable and unless the lease has a cause saying that in the event of one clause being invalid the others stand, the whole document would be compromised.  Will be very interested in the result, good luck!

Jon 

I would make sure that clause in the lease is legal. Your attorney's comment might be a warning that a judge would invalidate. This is state dependent but most of the time leases survive any change of ownership, regardless of what someone put in there. Did your attorney say one way or the other?

@Charlie MacPherson and @Robert Loiselle and @chris Franklin are giving good advice. The lead paint database is rarely accessed or even known of by realtors--they have no incentive to be informed. We walked away from one property where the unit had been flagged and I really don't think anyone involved in the transaction knew about it. Certainly no broker I have ever worked with in MA has suggested looking it up.

Practically, most everyone in MA gets by on a kind of don't ask don't tell policy of signing the disclosure that no one knows if there is lead, when everyone knows there is probably lead in there somewhere. Lots of problems and perverse incentives to that approach-such as landlords not wanting to rent to people with kids even though thats against the law--but its pretty commonly done. Ultimately people are risking a lot by doing so with MA "strict liability" laws in place. 

But you don't have even this option. 

It was flagged very recently and properties generally don't wind up in that database unless there was a complaint and the condition is pretty egregious. You have to fix it, and not just practically but by crossing all the expensive "Ts" and dotting all the super expensive "I's"  

You would be in a lot of trouble. I'm simplifying, but did you know the baby could ingest lead from dirt in some completely random place and you would still be liable because they don't have to prove it came from your house if you are not compliant--and in this case they have documentation that proves its in your house. Oy.

And don't feel bad for the seller he is ignoring that THERE ARE TWO KIDS IN THERE THAT COULD BE POISONED. Its an actual health problem from what you describe, not just a theoretical burden. His behavior is outrageous. @Chris Franklin did the right thing to protect the kids even despite the parents bad behavior. Your seller is failing his obligation to those kids, don't join him.